CAG report on MIDC flags issues with policies, highlights unutilised industrial plots

As per the report, out of the 3,284 industrial plot allottees at the Trans Thane Creek (TTC) area, 3,053 plots are lying unutilised. The MIDC had decided in June 2017 to implement a scheme in the TTC industrial area (IA) whereby allottees (including closed industries) were granted an opportunity to return excess/unutilised land. It was further directed to take action against allottees who did not participate in the scheme as per Section 42A of the MIDC Act.

“Audit observed that none of the allottees participated in the said scheme and MIDC had not taken any action for acquisition of unutilised portion of plot till date (December 2021). Data analysis in respect of TTC IA revealed that only 231 (7 per cent) out of 3,284 allottees had fully utilised their plots. In case of remaining 3,053 allottees, land admeasuring 60.51 lakh sqm was lying unutilised,” the report said.

It further pointed out that data analysis of allottees from the other 158 industrial areas revealed that only 1,687 (5 per cent) of the 34,574 allottees had utilised the maximum FSI (floor space index). There was unutilised land measuring 12.15 crore sqm with 32,887 allottees, it added.

The report has also pointed out that the policy of fixation or revision of land rates was not appropriate. Systemic delays in the implementation of revised land rates were observed leading to a loss to MIDC, the report said. The MIDC allots plots of land on a lease basis for 95 years on recovery of upfront lease premium at rates fixed from time to time. Recovery of transfer fees, sub-letting charges, time limit extension charges, conversion charges, compounding charges etc. are also based on the land rates fixed by MIDC. It was, thus, essential to ensure proper pricing policies and periodic revision of land rates to protect MIDC’s financial interests.

The audit, however, observed that MIDC had not devised any methodology or weightage formula for the revision of land rates and rates were revised uniformly in all the IAs on an ad-hoc basis without any cost analysis or justification on record.

“MIDC made direct allotment of plots to ineligible allottees contrary to the laid down policies (e-bidding, waiting list, priority and expansion). Further, allottees were issued offer letters for allotment of land despite non-availability of carved-out plots in violation of MIDC regulations,” the report said.

Instances of undue concession to allottees in the recovery of revenue from lease premium, transfer charges, Urban Land Ceiling (ULC) exemption transfer charges, extension charges and sub-letting charges were observed. Irregular grant of instalments for payment of lease premium and non-forfeiture/refund of lease premium in violation of regulations/policy were also observed.

“Lack of system for periodic revision of water charges and service charges from the allottees was observed which led to short recovery of expenses. MIDC had not levied and recovered Goods and Services Tax on non-exempted services from the plot holders leading to non-payment of statutory dues,” it said.

There was no effective system to monitor cases of non-development of plots/obtaining a building completion certificate (BCC) within the stipulated time limit. MIDC did not initiate prompt action for resumption of plots and timely issue of notices for recovery of extension charges, the report said.

Instances of unauthorised sub-lease and change in use of allotted plots, lack of system for monitoring, removal of encroachments and irregular allotment of land to encroachers were also observed.